Conservative leader Kemi Badenoch has warned that Britain may be forced into an International Monetary Fund (IMF) bailout unless the Labour government delivers a clear plan for economic growth.
Speaking on BBC, Badenoch said she was “really worried” the UK could see a repeat of the 1976 sterling crisis, when Jim Callaghan’s Labour government was forced to borrow $3.9bn from the IMF.
“We are not growing enough. If Labour continues with no plan for growth, we’ll end up going to the IMF cap in hand,” she said.
Badenoch accused Prime Minister Keir Starmer’s government of creating a “doom loop” of high taxes, weak public finances and rising borrowing costs. She, however, offered to work with Labour “in the national interest” if welfare spending is cut and the two-child benefit cap is retained.
Her warning comes after bond markets pushed UK borrowing costs to a 27-year high, before easing slightly.
Labour dismissed her comments as hypocrisy. “Kemi Badenoch’s Conservatives crashed the economy and sent mortgages spiralling. The brass neck to offer advice now is beyond belief,” a party source said.
Economists are split. Some say there are “eerie parallels” with the 1976 crisis, while others insist the UK is not at risk of calling in the IMF.
